UK construction and property
- High-rise delays | Piling contractors have said that more needs to be done to tackle the delays to high-rise work caused by the Building Safety Act’s Gateway 2 checks. The delays have encouraged piling contractors to consider reducing their staff numbers and scaling back investment plans as delays extend far beyond the anticipated 12-week timeline. The Building Safety Regulator has acknowledged the problem and pledged to clear the backlog of 122 projects by April.
- Output | New construction work in four regional cities – Manchester, Leeds, Birmingham, and Belfast saw a contraction in output which was largely driven by global and domestic uncertainty. In 2024, 47 schemes were underway, compared to 64 in 2023 and 74 in 2022. Out of the 47 new build starts, 22 were residential, nine were student housing, 3 were hotels, 11 were office projects, and 2 were multi-purpose projects.
- Construction workloads fell in January as inflation increased to a 21-month high, according to the S&P Global UK Construction PMI. PMI was 48.1, down sharply from 53.3 in December. This is the first time workloads have fallen since February 2024. Building firms blamed macroeconomic conditions and delayed project starts from clients for the drop in work. The sharpest decline in work was in the civil engineering sector with commercial construction seeing the smallest contraction. Responses to the survey also suggested a return to inflation, with the steepest rise in input costs since April 2023 as suppliers passed on rising energy, transport, and staff costs.
- Social housing supply | Housing associations have cut their new-build plans as social tenants are largely excluded from the Building Safety Fund (BSF) with only 10% going to social housing. Rhys Moore, the executive director of public impact at the National Housing Federation told the Public Accounts Committee (PAC) that social landlords had two options: invest in existing homes, repair and maintenance, or cut back on development. Moore added that social housing projects in London were down 90% drawing a link between the decline and the BSF scheme.
- Social housing safety | Awaab’s Law, which forces landlords to fix dangerous homes has been delayed. From October, social landlords in England will have 24 hours to make emergency repairs, including to damp and mould. From 2026, the list of hazards will be expanded to include excess cold and heat, structural collapse, fire, electrical problems and hygiene hazards. Landlords will have until 2027 before having to begin fixing other hazards such as asbestos, exposure to lead or radiation and contaminated water supplies.
- Grey belt policy | Following a five-month inquiry, the House of Lords Built Environment committee has concluded that the policy to introduce a new ‘grey belt’ category of land within the green belt is unlikely to have a significant impact on housebuilding. The committee also found ‘grey belt’ sites had the potential to support SME housebuilders as the smaller size of some grey belt sites would be less economically attractive to large housebuilders. However, affordable housing requirements make it financially difficult for smaller firms.
- Nuclear plants | The government has announced plans to build more nuclear power plants across England and Wales by cutting red tape to make it easier to build them. Currently, nuclear development is restricted to eight sites. The new proposals will include mini-nuclear power stations in planning rules for the first time which also sees the scrapping of the set list of eight sites and removing the expiry date on nuclear planning rules – to prevent projects being timed out. A Nuclear Regulatory Taskforce will be set up to spearhead improvements in regulations to help more companies build in the UK, with the government soon to appoint an independent head to lead the taskforce.
- Housebuilding targets | Deputy Prime Minister, Angela Raynor, has said that there are “no excuses” to not build its election manifesto pledge of 1.5 million homes, but acknowledged that it “was going to be really difficult”. However, a survey by Knight Frank of housebuilders found that the sector expects to build only half of the annual target this year. Lack of cash and tougher rules on affordable homes are cited as causes for the delay and low delivery numbers.
- Administrations in the construction industry have reached a three-and-a-half-year low, according to data from Creditsafe. Ten companies went into administration in January.
